Which Permanent Account Is Affected by the Closing Entries

question 119

Multiple Choice

Which permanent account is affected by the closing entries?

• A)Income Summary
• B)Common Shares
• C)Retained Earnings
• D)Cash

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Definitions:

Machine-Hours

A measure of the amount of time a machine is operated during a given period.

Overhead Costs

Indirect costs of production that cannot be directly attributed to a specific product or service, such as utilities and rent.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate picture of the costs associated with producing a product.

Machine-Hours

The total number of hours that machinery is operating, used in cost accounting to assign machine-related costs to items.